Abrupt company layoff leaves 175 jobless

Author: Dina Magaril

The Vermont based Specialty Filaments Inc. (SFI), a manufacturing company specializing in synthetic monofilament design, closed its doors to over 175 workers on Jan. 11 when it filed for Chapter 7 bankruptcy. Bill Haynes, the company spokesperson, cited a combination of outstanding debt and an inability to compete with cheaper labor overseas as the two main reasons for the company's failure.

Most workers employed by SFI, which is owned by the Boston firm Capital Resource Partners, were not aware of the company's financial troubles, and were surprised by the sudden closing of the company's factories, which include two facilities in Middlebury and offices in Burlington.

"They told us [we were closing] right before it happened. We got no warning," said Bill Whitney, who had worked for the company for ten years as well as the union leader for Unite Here Local 2524. Though Whitney was aware that "the company had been struggling," and even sat in on some of the negotiations taking place within SFI, none of the workers were prepared to hear the news that the company was filing for bankruptcy.

"This came as a surprise to everybody," said Haynes. "The company was doing its best to try to compete for several years and finding it increasingly difficult to do so."

Haynes said that the company had been negotiating with its senior lender, Wells Fargo, for weeks before the decision was made to close indefinitely. "The surprise came when our lender said we defaulted on the loan, meaning that the company was forced to declare bankruptcy," Haynes explained.

SFI first suspended operations on Jan. 5 to discuss the company's future. "During the break [SFI] and the bank were trying to negotiate and come to an agreement and figure out what would be the best way to move forward," said Haynes. Unfortunately for the company's workers, moving forward involved getting laid off without severance pay.

"We got nothing," said Whitney. "They cancelled every benefit, one thing they couldn't cancel were our pensions, which are guaranteed by the federal government." The lack of any worker's compensation was a particularly tough blow for Whitney, who has four boys with his wife Sarah, the owner of a day care center who relied on the insurance provided by her husband's job.

Haynes described the company's closing as a nationally relevent issue, saying, "In some sense, this is really a national story in that a lot of manufacturing companies in the U.S. are struggling because of overseas competition," he said. While the company's debt was a contributing factor to the closing, Haynes said a bigger problem was the availability of cheap labor overseas, where "products are being made for much less money in countries like China."

When asked if there was any chance the company might be bought up and reopened, Haynes was hopeful but not convinced. "There is that hope that the company could be sold in the future," he said, "It's possible, but maybe not probable."

In light of the company's closing, laid off workers were invited to attend a job fair on Jan. 18 held at the Middlebury American Legion headquarters on Boardman Street. Katie Johnson, the business manager for Addison County's solid waste management district - a transfer station responsible for the management of Middlebury's recycling programs - was one of the companies that held a booth at the fair. Though the fair was open to all persons looking for employment, Johnson said it was obvious that the event was thrown together on short notice, mainly to assist those workers laid off from SFI.

"We heard about it, made some phone calls and got involved," said Johnson. Though Johnson said her company didn't have too many job openings, it is in the process for interviewing for a new scale operator. "As an employer, it was really hard to see that," said Johnson, referring to the estimated 120 employees from SFI that she saw wandering around the job fair. "A lot of folks worked there for 20 or 30 years, they worked a lifetime," she said.

Whitney was one of the hopeful attendees, saying he filled out some applications but that "nothing is definite yet." Johnson described the job fair as filled with an "air of optimism," but perhaps for the wrong reasons. "I think some of the workers [that were laid off] are hopeful that the company will be bought up by a new owner and reopened," said Johnson. "But they're not going to just sit around and wait for that to happen," she said.